Frameworks and Models for startup Marketing — Part 1/3
This article covers the first third of major frameworks that I have encountered that might be of use to you when you begin to think about startup marketing. I will briefly go through the classical startup frameworks and the delve deeper into frameworks that are specific to marketing and growth.
The article is a response to my own need for frameworks for unhindered thinking and clarity in making marketing decisions.
So, why are startup frameworks useful in the first place?
Startup Frameworks make for a great starting point in putting forward your ideas, implementing them, or looking at them from a different perspective.
Frameworks
Porter’s Five Forces —
Let’s start off with the classics. Every reader who has gone to business school or has an inclination towards business has come across the 5 forces framework.
Micheal Porter propounded the Five Forces Framework model leading to a large-scale adoption by many organisations. The basic tenet of the framework is that any company faces 5 major forces of competition when in a market, not just from its competitors.
The five forces are:
- Threat of new entrants — What is the time and cost of entry into the market? Are the barriers of entry high? What are the cost advantages? Is there technology protection? Do you have specialised knowledge about the market (contrarian question by peter thiel)?
- Threat of substitutes — What are your substitutes in the market? Are you 10x better than them (peter thiel)?
- Bargaining power of customers — How many customers do you have? What is the average basket size? Are customer price sensitive? Are the switching costs high?
- Bargaining power of suppliers — How many suppliers do you have? How big are they? Will you be able to quickly substitute suppliers? Are you overly dependent on one supplier?
- Industry rivalry — How many competitors do you have in the market? Are you 10x better either in speed/quality (Peter Thiel)?
All 2x2 matrices —
The power of drawing a vertical line intersecting with a horizontal line is grossly underestimated because the depth of clarity in demystifying complex concepts is so simple.
Technology Adoption Lifecycle —
This model was suggested by Clayton Christensen in the Innovator’s Dilemma. It is a sociological model that describes how a new product is adopted and describes the trends through a normal distribution curve.
The Startup Pyramid —
Sean Ellis suggested this model. He presently works at Qualaroo and GrowthHackers.com.
There are three phases to thy pyramid — Attaining Product/Market fit, Transitioning to Growth, Doubling down on Growth.
Product/Market fit
Marc Andreessen came up with the term Product/Market fit as
Product/market fit means being in a good market with a product that can satisfy that market.
As a startup, your entire energy must be focused on achieving the product market fit in the shortest time possible. How does one find out if their startup has in fact, reached PM fit? I will talk about a few ways here and link them to better resources:
- Product/Market Fit Survey (by Sean Ellis) — How would you feel if you could no longer use [product]?
- NPS (Net Promoter Score) — be careful with the false positives
- Measure engagement data in addition to the surveys mentioned to validate the alignment of data with actions.
- Build a retention curve
Brian Balfour’s excellent article on PM fit can be found here.
AARRR Frameworks by Dave McClure
AARRR is a framework to measure customer and model customer behaviour, then perform a set of actions with the right metrics to track for every stage.
The customer journey is mapped in a funnel of sorts as shown below.
For each part of the funnel, Dave presented a few questions, major actions that can be performed and metrics to aid tracking.
His infamous Slideshare can be found here.
The Hierarchy of Engagement — by Sarah Tavel
Sarah presents a framework to evaluate non-transactional consumer companies. The hierarchy has 3 levels — Growing engaged users, Retaining users and Self-perpetuating.
She also goes on to say:
As companies move up the hierarchy, their products become better, harder to leave, and ultimately create virtuous loops that make the product self-perpetuating. Companies that scale the hierarchy are incredibly well positioned to demonstrate growth and retention that investors are looking to see.
She goes on to present amazing slides here.
Quant-based marketing
QBM was used by Noah Kagan, Chief Sumo at AppSumo and previously at Facebook. He used it to grow Mint from X to Y users. The main idea of quant-based marketing is about working backwards from the goal and mapping out what you need on an excel. It’s that simple.
The next 2 parts will cover other frameworks related to startup growth.
Coming soon!
